Occidental’s Bonds Plunge After Moody’s Cuts Rating to Junk
- U.S. Permian operator rating cut by Moody’s due to debt burden
- ‘Many oil and gas companies will not make it,’ Hollub says
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Occidental Petroleum Corp. bonds plunged after being downgraded to junk by Moody’s Investors Service as the Permian Basin shale producer struggles to deal with a high debt load in the face of oil’s crash.
Borrowing incurred by the $37 billion acquisition of Anadarko Petroleum Corp. last year is a “burden” that compromises Occidental’s “financial flexibility to confront the collapse in oil prices,” Moody’s said in a statement Wednesday. It cut the company’s rating to Ba1, one step below investment grade, from Baa3.